Can the seller enter a new contract without returning my earnest money deposit?

UPDATED: Oct 1, 2022

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Can the seller enter a new contract without returning my earnest money deposit?

I was buying a house and seller was also the real estate agent. The home inspection addendum required the work be done by a licensed contractor. When we received the invoices from the work done, we found out the seller didnt hire licensed contractors. We gave her a second chance and again, she hired someone who was not licensed. We showed up to closing having fulfilled our end, but because she breached the contract, we did not buy the house and requested our EMD. She

refused to release the funds and now we saw that she has listed the property as pending under a new contract. I believe it is illegal for her to have signed a new contract before releasing our EMD and ending our contract. What is the best route of action to ensure our deposit is returned?

Asked on December 10, 2017 under Real Estate Law, Maryland


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Your *only* route to get the money is to sue her and show in court, by a "preponderance of the evidence" (that it is more likely than not) that she breached the contract in a material (imporant) way, thereby allowing you to treat the contract as terminated. (A material breach by Party 1 to a contract allows Party 2 to, at its option, consider the contract to be terminated.) Assuming you can do that, you can get court order for the release of the money. Based on what you write, you should be able to do this, since the contract required licensed contractors but you have evidence they were not licensed.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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